Wednesday, May 11, 2016

The government again consists of the tax system: No free amount, liquidation linear PIT – Interia

Work on the concept of a new tax system. The game consists of at least two solutions, the details, especially the span of the scale, are a closely guarded secret. But with the information that we were able to get it, you can see what elements may include future proposals.



More rates

The new tax would be progressive, consisting five, six rates. Such construct a tax would put the Polish tax system in a row with the majority of EU countries. The record-holder in the progressivity of personal income tax in Luxembourg, which was subject to 15 rates. To expand the scale decide also other members of the Union, eg. From this year six thresholds in force in Austria.

– The addition of a few extra degrees causes the differentiation of charges between the poorest and the richest would be higher. Significant, however, is at what level the income thresholds are set – says Joanna Narkiewicz-Tarłowska, director of the department prawnopodatkowym consulting firm PwC.

According to our sources, one of the reasons for the extension of progression is to avoid the so-called. the effect of a cliff we face today: the taxpayer to obtain revenue more than 85 528 zł per year, falls sharply from 18 percent. Rates for 32-percent. Increasing the scale of progression offset a practical linearity Polish PIT. Although the rates are two, as many as 97.3 percent. taxpayers accounted for by the first 18-percent. According to the data for 2014. (For 2015. Are not yet available) tax at the lower rate paid 23.7 million people, according to higher only 657.8 thousand. people.

Of course, the key will be to calibrate a new progression. And this will depend, among others, on whether the new tax will also include contributions to social and health insurance, whether it be the release of PIT as-we know it today. In some EU countries have a close relationship – eg. In the Netherlands, the first and second PIT rate is relatively low (8.4 per cent. And 12.25 per cent.), But be added to these social insurance contributions (28.15 percent. ). The third and fourth rate stepwise increase (to 40.4 per cent. And 52 per cent.), But with the highest income insurance contribution is zero.



No amount of free

One of the options under consideration are such calibrate the tax scale, which would allow giving up the tax-free amount to taxation. In such a scenario, the lowest rate would be adjusted so that the least affluent taxpayers were paying little tax, lower than it is today.

The resignation of the free amount would not be a new development in the EU. In the Netherlands, as a rule, there is no free amount, it may be granted in individual cases. In some countries, the amount is decreasing, which decreases with increasing income. So it is in Italy, where the highest income free of tax is 1,880 euros and decreases to zero with increasing income of the taxpayer. In Spain the amount of free is indeed high (9230 euros), but after a certain level of income disappears.

The liquidation amount of free solves at least two problems: causes the Constitutional Court’s judgment ordering her to raise and valorisation losing support in the tax system (not what Valorisation) and makes the promise of PiS election campaign with a significant increase amount becomes obsolete.

Nonlinear activity

2014. of linear settlements PIT, which is one of the tax rate 19 per cent., benefited 473 954 people. While the taxpayers who pay by the tax scale and who have crossed the threshold of 85 568 zł, was 657 764. So, if the line to join the tax scale, the number of paying higher taxes would increase by as much as 70 percent. How could translate into budget revenues? The tax payable by the group paying a linear rate amounted to 16.7 billion zł, and according to our calculations, if the same group of tax rate 32 per cent., The proceeds from PIT from this group could increase by nearly 11.5 billion zł and reach 28 1 billion zł. This solution has its advantages and disadvantages. The advantages of this treatment the same way all taxpayers and increased budget revenues. However, our calculation is just a projection based on current tax receipts. The question is how to react to taxpayers and this group is very heterogeneous. On the one hand, they represent the entrepreneurs running their own businesses and economic activity. The other part is the people whose form of employment in accordance with the spirit of the law should be time, but chose this kind, to pay tribute lower. It is possible that much of the taxpayers will look for the higher costs to reduce the tax paid.

– About all you can talk, when the proposal will be placed on the table. Linear PIT is a simple form of tax, and if the scale of the tax, it will raise the costs of administration on both the business and tax authorities, and yet the administrative burden for small companies had to fall – says Małgorzata Starczewska-Krzysztoszek Confederation Lewiatan.



Without thirtyfold

Another solution that can be implemented, is to eliminate the so-called. thirtyfold. This is the threshold beyond which the taxpayer continues to pay social insurance premiums. It is set at thirty times the average salary, and this year is 121 650 zł. Its abolition is approx. 8 billion zł higher incomes to Social Security, and thus a smaller budgetary grant. With plans to abolish that threshold already wore PO and this solution contained kampanijny idea for a uniform tax. The question is whether there is legal trouble. The purpose of this arrangement was that the public pension system does not lead to a big difference in the amount of benefits, because pensions are proportional to the contributions paid. Backed, which was abolished by thirty times, they could demand higher pensions. The government may, however, take a chance: abolish the threshold and ask the Constitutional Court whether the principles of social solidarity could not leave the restrictions in the amount of pensions.

Work on the new system or major modification of the current progress in the Prime Minister’s Office. – I think the main concept will be announced early in the summer and will present the minister or the prime minister Paul Szałamacha Beata Szydlo, today it is too early to talk about it – says Andrzej Jaworski, head of the parliamentary commission of public finances. But actually it is not a foregone conclusion that it will be implemented. If it turns out that the expected gains from the introduction of the new system are small, and the risk of disruption of budget revenues high, then the government can do not show the project, and make only adjustments in the existing system.

Marek Chądzyński Grzegorz Osiecki, 05/11/2016

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